Willie Sutton’s Blues

Willie Sutton robbed the banks, that’s where the money was. He got away a hundred times or more. But Willie only robbed the rich, some say a noble cause. He would never stoop to robbing from the poor. And if he were alive today We’d really see him blush, To see the way the banks today Are busy robbing us.

In Chicago, Al Capone’s police were always on patrol. The judges tried to keep him out of jail. Though Al was big, with all those politicians on payroll, He would never claim to be too big to fail. They got him on his taxes, but He’d view it with disgust To see the way the banks today Are busy robbing us.

With bailouts and foreclosures and financial lending fraud, Watch out, ’cause all these men are still at large. And not a one has gone to jail, does that strike you as odd? There’s no democracy with criminals in charge. They’ll drain Social Security. Or anything that’s flush. And that’s the way the banks today Are busy robbing us.

Corporations own the Congress, the Supreme Court paved the way, To rob the people from the Senate floor. They change the laws and slip away, and we all get to pay. Old Al Capone could not have asked for more. And if he were still alive today, Would Willie Sutton blush! To see the way the banks today Are busy robbing us.

What’s it about? It’s pretty simple, really. The financial sector in the United States is systematically stealing from everyone else. If you don’t find this more or less outrageous, you are probably not paying attention. While Wall Street enjoys record profits, American citizens are squeezed into poverty, deprived of their homes and even their pensions. Since about 1980 the financial sector has for all practical purposes gained control over the government of the United States. This has been thoroughly bipartisan. Although the Democratic and Republican parties are sharply polarized on social issues, they have shown deep agreement in promoting the interests of the financial elite, at the expense of the nation as a whole. This explains the apparent paradox that, after the catastrophic events of 2008, President Obama, after coming into office with an overwhelming mandate for change, kept the same people in charge of the financial sector, has declined to prosecute the numerous financial crimes which continue to haunt us, and has produced no meaningful financial reforms in the past five years. Economic inequality in the US is far more extreme than most Americans are aware of, as shown in this video graphic. There will always be rich and poor, but when a society becomes extremely economically polarized, the whole society suffers. There is decline in education, opportunity, mobility and trust. Crime goes up, and life expectancy goes down, even for the wealthy. These important relationships are established in The Spirit Level (Pickett and Wilkinson 2010), and summarized in this 15-minute TED talk. Until about 1980, the United States economy worked reasonably well for rich, poor, and those in between. Education was strong, and hard work was generally rewarded. In the past three decades, however, the top 1% has taken the majority of our economy’s surplus, and almost half of us are either heading into poverty, or already there. The stock market is at an all-time high, but many Americans are facing insecurity not seen since the Great Depression. How is this possible? The deregulation of corporate America, and the financial sector in particular, has played the main role in transforming the US into its current state. After the Great Depression, the financial industry was carefully regulated, to insure that it would not threaten the public interest. In particular, the Glass-Steagall Act erected a “fire wall” between investment banking and ordinary commercial banking, in effect protecting the savings of ordinary people from the risks of the stock market. Although the “deregulation ideology” is popularly associated with President Reagan, the dismantling of former protections, and progressive freeing of the financial industry from regulations, public or Congressional oversight, and liability for reckless behavior has been advanced by all subsequent administrations as well. In 2008, we experienced the results of an ungoverned financial sector with its epicenter in Wall Street. After crippling the global economy, not a single senior US banking executive has been brought to trial. There have been more than 4 million home foreclosures in the US since 2008, and tens of millions thrown into economically desperate circumstances at home and abroad, due largely to reckless, deeply unethical, and outright criminal behavior by many, many powerful executives in the banking and financial industry. These events have been described by many books and documentary films since that time. Was it really criminal behavior? Did people in the financial sector know what they were doing? The answer are “yes” and “yes”, according to Charles H. Ferguson in his 2011 Academy Award-winning documentary Inside Job,and his 2012 book Predator Nation: Corporate Criminals, Political Corruption and the Hijacking of America. Ferguson presents events in detail, including the specific crimes committed and the statutes under which they would ordinarily be prosecuted. It is only the setting of political corruption, and the power of the financial industry which has allowed these crimes to go unpunished. Shouldn’t we just move on? No, asserts Ferguson. With the financial sector more concentrated and larger than ever, and with carte blanche to engage in reckless behavior without consequences, the financial sector is an extremely dangerous parasite on the tangible “main street” economy. Only if we change the incentive structure of the industry, and hold executives responsible for criminal behavior, can we hope to regain a financial industry which is compatible with the public interest. America has become a “rigged game” since 1980, rewarding criminals and punishing honest working people. We are not likely to regain a functioning democracy, or any sort of general prosperity, until we recognize and tackle this central problem. Even if we succeed in reforming the structure and “toxic incentives” in today’s financial industry, we have much important work to do to bring our financial economy into alignment with the biophysical realities of this fragile planet we call home. Our current economy must grow (around 3% per year) or else crash; we have not yet learned how to establish a “steady-state economy” compatible with a steady-state planetary home. The problem with interest-bearing debt is that it requires constant growth of the economy. The economy must grow enough today to “create” the interest that will be due tomorrow. For an introduction to this concept, see Chris Martenson’s presentation in Madrid (2011). When the earth was big, and human presence small, economic growth was not a problem. But this is no longer the case. There are now over 7 billion humans, and we are consuming 1.5 earths worth of resources each year. So we have, in a nutshell, a debt-based economy which must grow, on a planet which cannot grow. Our failure to understand this dilemma is driving us to liquidate our planet to satisfy the needs of our financial system. For another banking model which can be compatible with both the public interest, and with a steady-state economy, see Ellen Brown’s new (2013) book The Public Bank Solution. Additional Resources: Richard Wolff (on Bill Moyers): Capitalism Hits the Fan Michael Hudson (2012) The Bubble and Beyond: fictitious capital, debt deflation and global crisis. Matt Taibbi (2010) Griftopia; bubble machines, vampire squids, and the long con that is breaking America.